Raising App Engagement Leads
to Higher Monetization

by Michael Lavoie

August is usually a time for holidays and relaxation. It’s also a good time to start preparing for the remainder of the year. If you’ve been following the last few issues of Navigator, you know we’ve been featuring the mobile app lifecycle. The prior two issues highlighted the Acquisition and Activation phases. This brings us to the Engagement phase.

It’s critical for brands to master each phase of the mobile app lifecycle, as each influences the size of the loyal customer base in the final stage. However, the Engagement phase should – and likely does – receive the most attention from marketers and app teams. That’s because this phase contains the largest portion of your mobile app customers and it’s where a customer will likely spend the most time. 

Engagement is essentially a regular exchange of value between a brand and customer. In some cases, this exchange is monetary. More likely it’s an exchange of information, an exchange of content, or an exchange of information for participation in a program. All of these interactions trigger signals, and understanding the signals is the first step to leveraging them for increased engagement.

Signals don’t always provide the same level of insight usually associated with key app monetization measures they indicate a customer choosing the mobile app as their interaction point with your brand. For example, if your app is subscription-based and you offer a free trial, you’re looking at early usage metrics that indicate a trial user is getting value in the trial period – or not. Understanding the usage metrics of paid subscribers in their free trial period provides an indication of whether free trial users are likely to convert to a paid subscription. Armed with this insight, you can begin to expose those free trial users who are interacting at levels below that of a paid subscriber to a series of messages, content or offers designed to stimulate usage and increase probability of conversion to a paid subscription. As such, the Engagement phase is the point in the app lifecycle where you create, amplify, monitor and react to signals.

Given the relatively large size of your customer audience in this phase, it will become clear early on that you don’t have a single measure of “engagement.” Daily Active Users (DAUs) or Monthly Active Users (MAUs) are common and important metrics, but these won’t guide you on how to improve or maintain engagement going forward. The fact is, regardless of app type, your brand knows intuitively how to define a high value customer, and the Engagement phase is where you establish the foundation for cultivating more of them. 

There are lots of tools and tactics in this phase for cultivating valuable relationships – Personalization, Localization, Gamification, Message Timing, Frequency & Automation are just a few. As you work to integrate these tools into your app audience engagement strategy, you need to precisely target them, which is how they are designed to be used. 

You can’t treat all your customers or potential customers the same. Deep app engagement depends on understanding and segmenting them. There are many segmentation approaches – behavioral, product, persona, tenure, value or opt-in status are some of the basic ones. All are designed to engage the customer in a manner consistent with their journey and expectations. My favorite example of segmentation and gamification comes courtesy of Starbucks. 

I’m a frequent visitor to Starbucks stores, so they have a lot of behavioral data on me (shout out to store #7329). I also receive weekly “Challenges” designed to push me to transact in ways that go beyond my regular behavior. The challenges usually revolve around purchase behavior, but rotate between product, frequency, transaction size and time of day. Over time, Starbucks is learning what behaviors it can nudge me to modify and how much it needs to incentivize me. These are not one-size-fits-all challenges. My wife also receives them, but her challenges are different – clearly designed around her previous behavior and challenge participation. 

Not all app types can engage customers the way Starbucks does, but every app should continually cultivate customers within the app or risk having their engagement atrophy. Sharing additional content, offers, product, functionality, news or events are tools for driving app engagement, but how you use them tactically will vary depending on your app type and segmentation approach.

Here’s a quick checklist for your app engagement strategy:

• Segmentation strategy that aligns with the app’s value proposition, customer personas and your monetization model
• Regular cadence of interacting with every app customer in a given period, as well as a frequency cap strategy to prevent message fatigue
• Interaction cadence based on the customer’s opt-in status – using in-app experiences for those who have not opted in to push notifications or other channel messages
• Collect customer preference data to better segment and personalize mobile app experiences
• List of key behaviors that drive high-value actions or monetary events
• Testing framework to measure the impact of various app experiences
• Matrix of behaviors that will trigger experiences and the high-value actions you want to drive
  

Cultivating app engagement is not a “nice to have” – it’s an imperative for maximizing your app monetization ROI. At Airship, we think about app engagement every day. We’re here to help you achieve your customer app engagement goals.